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2023 DIGILAW 1034 (RAJ)

Sanjeev Brothers v. Union of India

2023-05-05

ASHOK KUMAR GAUR

body2023
ORDER : Ashok Kumar Gaur, J. - The instant arbitration application has been filed under Section 11(5) read with section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator for settlement of the disputes and differences between the parties. 2. Learned counsel for the applicant Mr.Jatin Agarwal submitted that the respondent - Union of India had floated a tender for construction of Platform, FOB, PF, shelter, drain, RRI Building and other Ancillary work including Dismantling of MG Track, Laying of Board Gauge track, spreading of Ballast, tamping, transportation of P.Way material in connection with Jaipur yard remodelling and Jaipur Sikar, GC. 3. Learned counsel submitted that since the applicant was a successful bidder, as such his bid was accepted and the applicant was awarded work vide letter of acceptance dated 08.09.2016. 4. Learned counsel submitted that the work awarded to the applicant was required to be executed within a period of 12 months from the date of letter of acceptance. Learned counsel submitted that an agreement between the parties was executed on 11.11.2016. 5. Learned counsel submitted that the applicant after execution of the agreement started performing his part and on account of deficiencies on the part of the respondent, the work was delayed for some time and due intimation was sent by different letters to the respondent. 6. Learned counsel for the applicant submitted that the applicant also requested the Authorities in respect of his claims and dues, however, the respondent in spite of receiving letters and requests, did not perform their part. 7. Learned counsel for the applicant submitted that the claim raised by the applicant was denied by the respondents while communicating the order dated 13.02.2020. 8. Learned counsel submitted that after receipt of letter dated 13.02.2020, the applicant sent a notice for making payment and appointment of an arbitrator. 9. Learned counsel submitted that the respondent - Railway replied back by issuing letter dated 16.08.2021 and informed the applicant that since he has given 'No Claim Certificate' and his claims being time barred and the same is an "excepted matter" in terms of Clause 43(1), 43(2), 64(1)(v) and 63 of the Indian Railways Standard General Conditions of Contract (hereinafter read as 'General Conditions of Contract') and as per Arbitration and Conciliation Act, 1996 (hereinafter read as the 'Act of 1996'), the claim for appointment of Arbitral Tribunal was denied. 10. 10. Learned counsel for the applicant submitted that after receipt of letter dated 16.08.2021, the applicant was left with no other choice except to approach this Court for appointment of an arbitrator. 11. Learned counsel for the applicant submitted that Clause 63 of the agreement signed between the parties, provides for settlement of disputes and Clause 64(1) is for demand of arbitration. 12. Learned counsel submitted that the respondent has wrongly rejected the claim of the applicant on both counts; (i) excepted matters and; (ii) on the ground of delay. 13. Learned counsel for the applicant also submitted that as far as the law relating to excepted matters/contract not arbitable is concerned, recently the Apex Court in the case of M/s.Park Infrastructure Limited v. Union of India and Ors. (Special Leave to Appeal (C) No.30972/2018 decided on 11.04.2023, has laid down the law that only on account of 'No Claim Certificate' issued in favour of a contracting party, the application under Section 11(6) of the Act of 1996 cannot be dismissed. 14. Learned counsel for the applicant submitted that the Co- ordinate Bench of this Court in S.B.Civil Arbitration Application No.22/2021 (M/s. Rama Kishan Ashok Kumar (JV) v. Union of India and Anr.) decided on 12.01.2023 has also taken a similar view after considering the judgment passed by the Apex Court in the case of Union of India v. Parmar Construction Company reported in (2019) 15 SCC 682 . 15. Learned counsel for the applicant submitted that in view of the law laid down by the Co-ordinate Bench of this Court as well as by the Apex Court, the rejection of claim of the applicant by the respondent is not justified and as such this Court is required to exercise its powers for appointment of an arbitrator. 16. Per contra, learned counsel Mr.Anand Sharma for the respondent submitted that reply to the arbitration application has been filed by the respondent. Learned counsel for the respondent submitted that claim of the applicant for appointment of an arbitrator may not be entertained by this Court. Learned counsel submitted that the arbitration clause cannot be invoked by the applicant after agreed limitation by the parties. 17. Learned counsel submitted that since the applicant has not submitted its claim in writing within 90 days from the date of preparing the final bill and as such, the claim is barred by agreed limitation. 18. Learned counsel submitted that the arbitration clause cannot be invoked by the applicant after agreed limitation by the parties. 17. Learned counsel submitted that since the applicant has not submitted its claim in writing within 90 days from the date of preparing the final bill and as such, the claim is barred by agreed limitation. 18. Learned counsel submitted that the applicant had signed the final bill on 04.07.2020 and thereafter by invoking arbitration clause, the applicant-claimant give notice to refer the matter for arbitration on 30.03.2021 and the same is admittedly much after lapse of 90 days. 19. Learned counsel refers to Clause 64(i)(iv) of the General Conditions of the Contract and asserts that if the claim is not raised within 90 days, the same is not required to be entertained even as per terms of the contract. 20. Learned counsel for the respondent further submitted that once the applicant-contractor has signed 'No Claim Certificate' and later on, the demand for outstanding amount against the respondent, will not be maintainable in view of the Clause 43(2) of the terms and conditions of the Contract. 21. Learned counsel submitted that the applicant did not raise any protest while he signed 'No Claim Certificate' and the applicant, after signing No Claim Certificate, is estopped to ask for appointment of an arbitrator and no dispute remains pending between the parties. 22. Learned counsel for the respondent has further placed reliance on an order passed by the Co-ordinate Bench of this Court in S.B.Arbitration Application No.48/2021 (M/s. JCC Infraprojects Pvt. Ltd. and Anr. v. Union of India and Ors.) decided on 21.09.2022. 23. Learned counsel, on the strength of the said judgment, submitted that the similar Clauses 63 and 64 of General Conditions of the Contract were considered by the Co-ordinate Bench and a view has been taken that the cases, which fall under the "excepted matters", as one party files 'No Claim Certificate, then such party cannot be allowed to raise the dispute at a belated stage. 24. Learned counsel for the respondents submitted that the two co-ordinate Benches of this Court have passed different orders on interpretation of General Conditions of the Contract, which is signed by one party i.e. the respondent-Railway and as such this Court may not entertain the application filed by the applicant. 25. 24. Learned counsel for the respondents submitted that the two co-ordinate Benches of this Court have passed different orders on interpretation of General Conditions of the Contract, which is signed by one party i.e. the respondent-Railway and as such this Court may not entertain the application filed by the applicant. 25. I have heard the submissions made by learned counsel for the parties and perused the material available on record. 26. This Court finds that the judgment passed in the case of M/s. Ram Kishan Ashok Kumar (JV) v. Union of India and Anr. (supra), the Co-ordinate Bench i.e. the Hon'ble Chief Justice has taken a view after considering the judgment passed by the Apex Court in the case of Union of India v. Parmar Construction Company (supra) and found that only on account of signing 'No Claim Certificate', it would not be appropriate to deny the right to one party of contract to approach an arbitrator for resolving the dispute and one party does not waive its right for seeking arbitration. 27. This Court finds that the judgment passed by the learned Single Judge in the case of M/s. Rama Kishan Ashok Kumar (JV) v. Union of India and Anr. (supra), since has taken into account the law declared by the Apex Court and as such this Court is also taking a similar view. 28. Learned counsel for the respondent submitted that another Co-ordinate Bench of this Court in the case of M/s.JCC Infraprojects Pvt. Ltd. and Anr. v. Union of India and Ors. (supra), since has taken a different view on interpreting the General Conditions of the Contract with respect to the Contract entered between one party i.e. Railways and as such this Court is also required to consider the said judgment as a binding precedent and it should also prevail. 29. I have gone through the judgment passed by the Co- ordinate Bench of this Court in the case of M/s.JCC Infraprojects Pvt. Ltd. and Anr. v. Union of India and Ors. 29. I have gone through the judgment passed by the Co- ordinate Bench of this Court in the case of M/s.JCC Infraprojects Pvt. Ltd. and Anr. v. Union of India and Ors. (supra) and finds that the Co-ordinate of this Court has reproduced the General Conditions of the Contract i.e. Clause Nos.63 and 64, which is pari-materia in the present case as well and the Co-ordinate Bench of this Court has only made an observation that the cases falling under the "excepted matters", then no dispute can be raised at a belated stage, after more than one and a half years. 30. This Court is also not required to express its divergent view on account of a recent pronouncement by the Apex Court in the case of M/s.Park Infrastructure Limited v. Union of India and Ors. (supra). This Court, deems it appropriate to quote the relevant para Nos.6 to 8 of the judgment passed in the case of M/s.Park Infrastructure Limited v. Union of India and Ors. (supra). "6. In the present case, it is not disputed that the reference was sought during a time when Section 11 (6A) was in operation. Section 11 (6A) was introduced pursuant to the 246 Law Commission Report, which recommended that in the light of the then existing law, which had expanded the Court's inquiry into facets such as accord, satisfaction etc. should be overborne. Taking this into consideration, Parliament, in its wisdom, enacted Section 11 (6A), which reads as follows: "(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement." 7. In the present case it is not in dispute that the arbitration clause was invoked during the subsistence of Section 11 (6A). This Court finds no proposition in Vidya Drolia (Supra) which is contrary to or not in harmony with the three-Judge Bench ruling in Mayavati Trading Pvt. Ltd (Supra) which is decisive on the issue i.e. that the courts are precluded from examining whether there is a dispute or not as is sought to be urged by the Indian Railways. 8. For the above reasons, the impugned orders are hereby set aside." 31. 8. For the above reasons, the impugned orders are hereby set aside." 31. This Court finds that the Apex Court in the aforesaid judgment has taken into consideration the judgment of the Apex Court in the case of Vidya Drolia and Ors. v. Durga Trading Corporation reported in (2021) 2 SCC 1 and Mayavati Trading Private Limited v. Pradyuat Deb Burman reported in (2019) 8 SCC 714 . 32. This Court finds that the distinction, which has been made by the Apex Court in respect of earlier two cases of Vidya Drolia and Ors. v. Durga Trading Corporation (supra) and Mayavati Trading Private Limited v. Pradyuat Deb Burman (supra), is on the basis of availability of Section 11(6)(a) of the Act of 1996. 33. The invocation of Arbitration Clause is to be seen during subsistence of Section 11(6)(a). This Court finds that Section 11(6)(a) of the Act of 1996 was substituted by the legislature with effect from 23.10.2015. The facts of the present case reveal that the contract between the appellant and the respondent was signed on 11.11.2016 and as such the interpretation granted by the Apex Court in the case of M/s.Park Infrastructure Limited v. Union of India and Ors. (supra) will apply with full force in the present case as well. 34. The submission of learned counsel for the respondent Mr.Anand Sharma that the claim of the applicant is not only falling in the category of "excepted matters" but it also barred by limitation, suffice it to say by this Court that the issue with regard to time barred claim or objection being not raised within the stipulated time, can always be raised at appropriate forum and as such this Court at the time of appointment of an arbitrator, cannot pronounce upon such issues. 35. This Court, accordingly allows the present arbitration applications filed by the applicant-petitioner and while exercising the power conferred under Section 11 of the Act of 1996, appoints Hon'ble Mr. Justice Prashant Kumar Agarwal (Retired Judge), C-82, Ram Nagar, Shastri Nagar, Jaipur, as the sole Arbitrator to adjudicate the dispute between the parties. The payment of cost of arbitration proceedings and arbitration fee shall be made as per the 4th Schedule appended to the Act of 1996. 36. The intimation of appointment, as aforesaid, may be given by the counsel for the parties as well as by the Registry to Hon'ble Mr. The payment of cost of arbitration proceedings and arbitration fee shall be made as per the 4th Schedule appended to the Act of 1996. 36. The intimation of appointment, as aforesaid, may be given by the counsel for the parties as well as by the Registry to Hon'ble Mr. Justice Prashant Kumar Agarwal (Retired Judge), C-82, Ram Nagar, Shastri Nagar, Jaipur.